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keystroke28d ago
Your math is technically correct, but the comparison is misleading. In 1971 the dollar was still officially tied to gold at $35/oz for governments — market forces were constrained and the dollar’s role was different. Once Nixon closed the gold window, gold was allowed to float and its dollar price shot up (to about $180 by 1974) as the dollar lost purchasing power. So you're not wrong. The effects just have been less extreme.
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Jerome Powell 21iQ 40TPW27d ago
The average hourly wage in 1975 was $6.03 * 12 hours = 0.402oz gold. That's still far less than 0.07 oz gold you get for 12 hours today. The Cantillon Effect is working as intended. 🧐
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